Two scenes from different parts of the country paint a picture of the grim reality behind the government’s statistics on unemployment.
In Akron, Ohio, 500 people braved a harsh winter storm on February 12 to apply for possible jobs at FirstEnergy Corp. When company spokespeople arrived, 50 people were huddled on the snow-covered sidewalks, waiting for the doors to be unlocked for the job fair.
The next day, in Sacramento, Calif., 48-year-old Irene Maciulla was scouring the binders of job listings at the state Employment Development Department. Eight months ago, Maciulla lost her job as an in-home care provider. She was recently denied a temp job stuffing and licking envelopes. “The man told me I had to have a year’s experience,” Maciulla told the Sacramento Bee.
The national unemployment rate jumped from 4.7 percent to 5 percent in December, and according to government statistics, the number of jobs in the U.S. fell in January by 17,000, the first decline in overall employment in five years.
Such figures tell an ugly story for the future of U.S. workers–but it’s only one part of the story.
For a growing number of workers, being unemployed means being unemployed for a very long time. According to the Department of Labor, 1.4 million people have exhausted their 26 weeks of unemployment compensation, but are still actively trying to find work. That’s the population of San Francisco–times two.
For all of 2007, about 17.6 percent of those who were jobless had been out of work six months or more, according to a report at CNN Money. That compares to 11.4 percent in 2000. “You have to understand that 5 percent unemployment today is worse than 5 percent unemployment 10 to 15 years ago,” Jason Furman of the Brookings Institution told CNN Money.
The time that workers are spending without employment is expanding, and so are the kinds of workers being affected. A Congressional Budget Office (CBO) report released October 2007 showed that workers who didn’t graduate from high school were not only more likely to be unemployed, but more likely to be long-term unemployed.
Between 2001 and 2003, the report stated, “one in six of the adults who experienced any unemployment and one in five of the adults who experienced a long-term unemployment spell did not have a high school diploma.”
But now, it’s common for long-term unemployment to hit workers who might previously have had an easier time finding a new job–workers with years of work experience, skills, training or education. In fact, prior experience–what is typically viewed as an asset to prospective employees–appears to be having an opposite effect in many cases.
According to the New York-based National Employment Law Project’s analysis of Labor Department data, workers 45 years or older make up 27 percent of the total workforce, but they are 37 percent of the long-term unemployed.
One of them is Deborah El, a 64-year-old resident of Pittsburgh. She was laid off from her job as a program coordinator at a nonprofit literacy agency, and her 26 weeks of unemployment benefits are set to expire this month.
El, a diabetic, cares for her 26-year-old disabled daughter Orissa while she looks for a job and a place to live. “I don’t know what I’m going to do,” she told the Associated Press. “I’m really scared. I’ve never been like this before. I’ve always been employed, I’ve always worked. I went back to school a few years ago and got a master’s degree, but it doesn’t mean anything.”
Of the recently recorded jobs lost, most came from the manufacturing and construction industries, as well as state governments. The Bureau of Labor Statistic’s (BLS) Establishment Survey, which calculated an average job growth over the last three months, showed that only 42,000 jobs had been created per month. This, compared to 169,000 a month over the comparable period a year ago.
The housing crisis is a large part of the reason for many of the job losses–hiring in construction has spiraled downward, and the end is nowhere in sight. According to the BLS report, construction unemployment is double the overall rate, at 11 percent.
These numbers will probably get worse. According to projections by the Economic Policy Institute (EPI)–based on a forecast that the unemployment rate will have increased to 6.2 percent by the last three months of the year, and the historical relationship between the unemployment and the share of the jobless who are long-term unemployed–some 1.9 million workers will probably be out of a job for the long term by the end of 2008.
To make ends meet, unemployed workers have to use whatever savings they have–then they start borrowing. “We’ve burned through all of our retirement trying to survive,” Les Tarlton, a father of five who worked in the telecommunications industry for eight years when the company he worked for in Dallas shut down in January 2003, told CNN.
One makeshift solution: more and more working people are moving in with relatives. A New York Times article on the exodus of jobs from Ohio noted “an upending of the traditional pattern, in which middle-aged children take in an elderly parent.
“As $15-an-hour factory jobs are replaced by $7- or $8-an-hour retail jobs, more men in their 30s and 40s are moving in with their parents or grandparents, said Cheryl Thiessen, the director of Jackson/Vinton Community Action, which runs medical, fuel and other aid programs in Jackson and Vinton Counties.
“Other unemployed or low-wage workers, some with families, find themselves staying with one relative after another, Ms. Thiessen said, serially wearing out their welcome.”
When the long-term jobless do find new work, the jobs usually come with a substantial wage cut. According to a study of workers who lost full-time jobs between 2001 and 2003 and found a new job before they were interviewed in 2004, the average pay cut for the new position was 17 percent–about double the average loss for workers displaced in the late 1990s.
Darrel McKenzie worked as a maintenance man at Meridian Automotive Systems and grossed more than $60,000 a year before the Jackson, Ohio, auto parts plant shut down. Now, he’s had to start all over again as a union pipefitting apprentice and expects to make $20,000 this year. His family just “does less,” McKenzie told the New York Times.
Jeffrey Evans also worked for Meridian–and lost his job after 30 years. Now, he’s moving in with his mother, another laid-off Meridian worker with 28 years on the job. “I lost everything I worked for all my life,” he said.
In some cases, workers who have been unemployed for more than half a year stop looking completely. According to the October 2007 CBO report, “Spells of unemployment often ended with the job seekers leaving the labor force rather than taking a job. About 70 percent of the unemployment spells begun by adults during the 2001-2003 period ended with the individuals taking a job; 25 percent ended with them stopping their search; and the remaining spells were still in progress when the survey ended.”
So at least one out of four unemployed workers had totally given up–and is therefore doomed to fall through the cracks.
Seldom mentioned, too, are workers who are employed only part-time, even though they are seeking full-time positions–those considered “underemployed” in the government’s statistics. In January, 9 percent of workers were underemployed, according to the BLS–the highest level in two years.
In spite of these statistics, however, the Bush administration and Congress couldn’t manage to include an extension for unemployment benefits in the multibillion-dollar economic stimulus plan passed by Congress last month. This even though a similar benefits extension was passed in March 2002, when the number of unemployed workers who had exhausted their benefits was fewer than today.
Workers who are falling behind will face an even worse situation unless the jobless benefits they’ve earned are protected–and extended.
ELIZABETH SCHULTE is a reporter for the Socialist Worker.